JOIN USRetail auto sales hit record high on wedding season boost
India's retail auto sales clocked record numbers in November, boosted by strong demand in the festival and wedding seasons.
The retail sales in the month stood at an all-time high in the history of the world's fourth-largest auto market, with an exception of March 2020 when the numbers were higher due to BS-4 to BS-6 transition, according to the Federation of Automobile Dealers Associations (FADA).
Experts also attributed the 26 per cent overall retail year-on-year growth to the fulfillment of pent-up demand from the earlier months.
"The record auto sales figures are driven by the wedding season, fulfilled vehicle deliveries of previous months' orders, especially the registrations spilled over from last month’s festival period," said Suraj Ghosh, director, Powertrain & Compliance Forecasts, South Asia, S&P Global Mobility.
Even when compared with 2019, overall retail sales showed growth for a second consecutive month, reclaiming the pre-pandemic glory of the industry.
Experts expected consumer sentiment to improve further.
"Though there is no major delta visible in any major economic indicator, there appears to be a sense of positivity among consumers in both urban and rural markets. And this positive sentiment may be driving some of the demand," said Ghosh.
While RBI's latest consumer confidence data pointed to a recovery, the central bank’s latest interest hike would result in costlier auto loans and could dampen demand for two-wheelers and entry-level passenger vehicles, the FADA report.
While most of the segments showed growth over the 2019 levels, the two-wheeler segment showed a marginal drop. A lot will depend on the harvest for the growth of this segment, said industry stakeholders.
"For Bharat (rural India), normally after the harvest starts, farmers get money in hand and this starts the spending cycle. We expect spending for auto sales to go up once the harvest comes into the market and farmers start getting money in their hands," said FADA president Manish Raj Singhania.
Others agreed.
"Could be an odd month, a lot will depend on the harvests," said Ghosh. "So, I’m not too positive on the sustainability of this demand level.”